months of declining in the index, and i think it's, you know, definitely something that should be on everyone's radar. >> all right. that does it for us. you've got the markets off their best levels of the day this final day of what has been a very rough quarter. "power lunch" picks up that story now. >> okay, everyone to "power lunch." along with mandy drury, i'm tyler mathisen. a bullish end as scott just pointed tout a very bearish month and a very bearish quarter. the average is posting their biggest gains today in three weeks though they are, as scott mentioned, a little off the high, but it is nice on this last day of september to see some green numbers in the column. the dow, s&p, and nasdaq all down more than 7% in the third quarter. there you see the graphic. look at that. is there a fourth quarter rebound ahead for equities? we'll ask jpmorgan's trillion

dollar man richard madigan what he's putting to work in the fourth quarter. and a big hurricane heading to the east coast of the united states. it will certainly bring some rain to the ooebs coast over the next few days. first though, let's check in with mandy at the nyse. hi. >> hi there, tyler. it may be very wet and very sort of gloomy and gray out there on wall street but we have a mini rally going on. stocks are definitely losing steam though. we might be up by triple digits on the dow, but we're well off the highs of the day. we were up 248 appointments at the high. now up by 110. as for the s&p, it's gaining by 16 points. the nasdaq also in the green. let's get more with our good friend bob pisani back from laguna beach. lucky you. >> a wonderful time out there. come back to a hurricane. >> is this a worry, sell into rallies mentality that's going on here? or is there something else at play? >> we had great steam going into the european close and have lost it ever since. let's look at the s&p 500.

great start to the morning, all ten sectors of the s&p were on the upside and as you can see, you can't see the number but right around 11:30 as the european clone, we started losing altitude. we were 3 or 4 to 1 advancing to declining. now we're only 2 to 1. it's moderate to heavy. slightly to the heavy side. let's split the difference there. in terms of what's active, not a lot of heavy volume but health care etfs after a terrible close, september has been awful, like the ibb and the pjp, that's getting a lot of interest recently, big pharmaceutical names, merck and pfizer. they have heavy volume today all on the upside. in terms of the month, the quarter, you know what happened here. it's very simple. bonds outperformed stocks again and what's shocking to me is the russell 2000, the small cap u.s. focus index performing much worse than the s&p 500. i guess the only good news i can offer here, october is usually

the month stocks have bottomed in the past. we're into a positive trend. i know dom will address that. >> we'll talk more about whether or not we can find that bottom. thank you very much, bob. we'll check in with you later on. let's get out to bertha coombs at the nasdaq where if we end higher we could avoid our first seven session losing streak since late 2011. >> yeah. we are seeing a broad move in tech and health care today with etfs of some of the worst sectors of late, chips and biotechs leading the way higher. biotech is the only sector with any real strength in trading volume, already having traded a full day's volume coming off an eight-day losing streak. if biotechs don't reverse again today like we saw yesterday, they will still have been giving up all of the year's gain this is month losing nearly 20% for the quarter ending a ten-quarter winning streak with the worst quarterly performance since 2002. so a lot of folks not quite ready to determine a bottom there. of the major indices, the nasdaq

100 is ending on the strongest note and some of the momentum stocks continue to buck the trend. google and amazon with double digit gains this quarter and activision blizzard and graphic chipmaker nvidia gaining more than 20%. nvidia at a 52-week high. apple today has been either side of unchanged but apple is ending a five-quarter win streak with the biggest quarterly decline it's seen since 2013. >> thank you very much. we end the third quarter in the red. how does the fourth quarter usually perform? we know a lot of the mythology, dom chu, about october. a lot of big market events have taken place but the fourth quarter seasonal will be has been -- >> santa claus rallies, all the seasonal strength up the wazoo but let's break down the numbers for a bit. if you look over the course of the last month to date, down 4%. it hasn't been a good september. if you look at the broader scheme of things, we're entering

this fourth quarter down 7.5%. >> for the year. >> for the year. year-to-date. the reason why that's important is because let's take a look at the stats. because when the s&p 500 is negative year-to-date, it changes things a little bit for the picture. the s&p 500 performance since inception back in the late 1920s, it's been negative year-to-date through the end of september 30 times. it's been negative in the fourth quarter about a coin toss, 47% of the time. the average -- >> 57% of the time since inception. >> since 1928. >> so half the time it is negative. >> when it's negative going into the fourth quarter it then becomes negative in the fourth quarter half the time and the average return is down 0.7%. average return. >> after a negative year-to-date -- >> these are the numbers. >> it is negative half the time in quarter four. >> right. the reason why there's confusion here is because a lot of these stats you will hear seasonably speaking are going to conflict with each other based on the

time frames but something to keep in mind as we talk about santa claus rallies and everything else that's going to happen in october, november, and december. >> thank you. a warning from christine lagarde speaking with our own sara eisen about her global growth fears and sara joins us live from washington. >> hi, mandy, good to see you. important comments from the head of the imf as it relates to the big federal reserve interest rate decision. everyone wants to know what the global impact is going to be when the fed raises rates for the first time in nearly a decade. remember, the imf had been very cautious on this issues putting out a report saying best to wait until 2016 because of the global reverberations. today christine lagarde told me she walked back a little bit on the time frame, didn't say 2016, but did make it very clear that now is not the right time. so i asked if janet yellen does go through with an interest rate hike this year, would that be a

mistake? >> i wouldn't say that. i'd say that, again, let's make sure it is data dependent. if the data are not telling that story of inflation rising a bit by december, then why do it in december? because i think -- chairman yellen was absolutely right to say it should be data dependent, and she's gone into great details to explain what data, how it should be looked at. we're impressed and happy with that. >> she does not see the data being there to signal an interest rate increase. she's watching emerging markets very carefully, guys. she says there's more pain to come for emerging markets, particularly financial volatility as the world readjusts to a world of higher dollar and higher borrowing rates, particularly sounding the caution alarm on corporate defaults around the world as a result of the uncertainty and the first federal reserve interest rate hike. back to you. >> thank you very much sara eisen. hurricane joaquin becoming

the third big storm of the 2015 season. this morning the big question is will it make landfall with the east coast of the united states. the weather channel's maria larosa is tracking that storm. >> all eyes are on hurricane joaquin. here is the latest information that we have. max winds at 80 miles per hour. it's moving to the southwest at 6 miles per hour, and that's important because there you have the bahamas. it is also very low central pressure, 971 millibars. so we may see the winds react to that strengthening and continue to see those winds go up. but right now your hurricane watch is in orange, hurricane warnings in purple. the bahamas need to be on high alert right now. after it makes that southwestern turn and that turn to the north, now we're talking about all eyes on the mid-atlantic and the northeast. so over the next few days it is forecast to strengthen, perhaps a major hurricane as early as saturday morning, and you can see in play here in that cone from cape hatteras into new york but all the way into new england. so the next several days and

what the models are going to be pulling for hurricane joaquin will be very important as far as impacts go across the northeast. back to you. >> okay. thank you very much, maria larosa. carl icahn speaking with scott wapner about his market fears saying the joy ride for stocks is over. the joy ride, however, does continue today with the markets higher, well off their highs though. the one stock icahn is still betting on coming up. you're watching cnbc, first in business worldwide.

welcome back to "power lunch." i'm mandy drury at then yse. goldman sachs downgrading american airlines to neutral from buy. the firm also cutting its price target to $44 from $48. it's currently at $38 and change and down by over 2%. hewlett-packard planning a big bond offering to finance the spinoff of hewlett-packard entrer price. the offering is expected to be up to $10 billion in size. and ralph lauren is currently up more than 12 perfection ambassador the ceo announced he's stepping down from the namesake brand. an old navy executive will serve as the new ceo. old navy is part of gap. gap getting a downgrade by ubs today on the news of that

executive's departure over to ralph lauren. let's get more now with a market flash. dominic chu, what are you watching? >> hudson city bank corp is spiking on news that the fed, the federal reserve board, has approved its deal to be acquired by m & t bank, two larger regional bank players in the east. the purchase of hudson city was originally announced more than three years ago but stalled by the regulatory issues. the deal was valued at $3.7 billion. it's the longest delayed u.s. bank deal worth more than $100 million on record. it gets approval. back over to you. >> thank you very much. carl icahn speaking with scott wapner about what's making him worried about this market. saying the joy ride for stocks is over. i didn't catch the whole interview. i heard him talking about donald trump but maybe more importantly for our viewers is this call on the market. >> we'll try to give you a taste of what he told me. you got a little bit of a taste of that this week with his

danger ahead video where carl icahn lays out a number of issues that are worrying him these days, including fed policy which he thinks has created asset bubbles in things like high yield, in art, and in real estate. told me before that he thinks that stocks could go down a lot more. when pressed today whether we're still in a bull market or whether we've entered a bear market, here is what mr. icahn said. >> you could get an up week, an up month here at this moment in time, but, yes, i think the joy ride is over as you see in my cartoon. in my presentation, you know, you could tweet down it on my website, you see the cartoon with janet yellen pushing the bus over the cliff and i think it's going to go over the cliff to some extent with the high yields in the etfs. >> i want to make a point where he's talking about this cartoon, about low interest rates having

fueled these asset bubbles and in the past he's blamed blackrock in a sense and larry fink. i just say that the blackrock folks have come on our air and larry fink have satisfied along with rick reider and said they think the fed should have raised rates as well. i want to make sure that point is out there and clearly known. we talked about a number of stocks as well as his overall market view as far as apple which he claims is undervalued, is thinking about more. then we got into some newer positions in energy, commodities, the miner freepo freeport-mcmoran when i ask what he see this is a stock like this that has been beaten down? >> you have to have a certain temperament for that, which i do over the years developed, where you're willing to buy things when they're down like this, like a freeport, like a commodity company, and be willing to go in and take this as a golden opportunity to buy them because i do believe in three or four years looking ahead, i know i'm getting hold

but this is what i've done all my life, buy them when nobody wants them, when they're throwing them on the fire, and then put them away and don't worry that they go lower. in fact, be happy they go lower so you can buy more of them. freeport is that example. >> well, he did hint as well that there's probably some activism as you might expect in the near future with a name like freeport. the stock ticking higher as he was making those comments. he also bought shaneer energy. he's on the opposite side of where jim chanos is. >> and he endorsed donald trump. officially endorsed him. they're going to get after me for asking this question because we're running out of time but the transmission mechanism he's worry being is the idea that too many people who can't make any money on safe savings, cds, savings account, money funds have migrated into risk assets. >> not even migrated, have in a sense been pushed. >> by the fed.

>> the hunt for yield has pushed people in risky areas whether it's high yield, whether it's real estate, whether it's art, and then when they try to get out and there's a run for the door, there's nobody on the other side to take thely quiddity to be there on the other side of the trade -- >> and he's concerned about high yield, that enough of the underlying companies could default on their debt as happened in the mortgage crisis when people defauthed on their mortgages, right? >> and he's been advocating his view on high yield for many, many months, including at our delivering alpha conference where you remember the comments that he made there. so it's not a new thought. we're just getting what sounds like a more dour carl icahn and his world view of the market, at least where we are right now, not to say that as a long-term investor he doesn't think five to ten years from now stocks are going to be a good investment. he's not saying that or a bad investment. >> scott, thank you very much. i'm going to bring in ran

insana. let's pick up where i left off with scott. is there validity to the point, to icahn's point, that in keeping rates so low for so long what some have called like bill gross a war on savers, that people have migrated into assets that are ultimately going to prove troublesome and inappropriate for them. set aside whatever criticisms he has with blackrock, a purveyor of high field funds and etfs, whatever, but that's the fundamental thing. >> i don't see how people can be critical of the fed when we're living in an abnormal deflationary world. what we learned in the 1930s in the united states, what we learned in japan and are relearning in japan today is policy errors exacerbate recessions and deflationary tendencies. so the fed has been right i think as i have stated many times in keeping interest rates low. does it have the perverse effect of pushing some people into riskier assets? there's not a lot of retail necessary invested in the stock market.

there may be some retail investors in high yield. should point out that 0.7 of the hyg, that high yield etf, is comprised of mr. icahn's high yield debt so it's interesting he's short of an index that has some of his own debt in it. it's benchmarked so it's not his choice to put it in there. what i also find interesting is that his stock has gone from a high of nearly 150 down to $66. i would wonder if any activist investor might want to get involved there and agitate for change given how far it's come down. he seems to be making money for himself but like mr. trump, not much for his shareholders at the moment. with respect to his overall outlook, could something go wrong? absolutely. will it be precipitated by an extended increase in federal reserve interest rates? it would as we've seen in other periods. but by itself criticizing the fed for counteracting the impact of a financial crisis that was of great magnitude -- >> i'm not so sure he is doing

that but what essay something they kept those rates too low for too long. >> but we don't know that. he's talking about companies that have engineered themselves to buy back stock. he's one of the agitators. he's one of the financial engineers that want companies to lever their balance sheet, buy back stock, and raise dividends. i see some issues and conflicts in what he's been saying. >> and the buy backs take stock out to get the eps out. >> which is what he criticized and pushed for at the same time. >> mandy. >> we're doing okay today but it's been a tough month and a brutal quarter but it does look like we could still end higher today. so, you know, finishing out a bad quarter on a high note. is a fourth quarter rebound ahead? we'll talk about that when power comes back in two. don't go away. nice long life a. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options.

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welcome back to "power lunch." i'm mandy drury at the nyse. it's time for power pitch where entrepreneurs get only 60 seconds to make their pitch and then a panel of experts decides whether the company has what it takes to become the next big thing. >> hi, i'm dr. laura oboler. >> i'm marjorie goldner. we have a simple mission. to make it easy for women to have babies. millions of babies are born each

year but not every one who wants a baby are so lucky. couples are currently spending $5 billion annually on fertility and there are no affordable options. our solution preg prep. developed for any woman ready to have a baby. >> as sperm swim to the egg it can be slowed down by cervical mu cass. this thins cervical mucus so the sperm has a better chance of reaching the eggs and it really works. and it's been so successful that it's currently being carried into 2,300 cvs stores nationwide. come join our megs and get preg prep into the hands of every woman ready to have a baby. >> we just saw the pitch for pre g prep now let's meet the panel. joining us is alicia syrett. she's invested in a number of health care companies. from flant we have dr. jackie walters. she's an ob-gyn.

jackie has explored adoption, surrogacy, iv f, and herbal supplements trying to get pregnant. and from san francisco, enmi kendall with healthy ventures, a seed fund focused obviously on health. so hello, everybody. great to see you there. alicia, would you like to throw out the first question? >> i saw on your website that claims are not evaluated by the fda and results may vary. how do you respond to people that say, oh, this is just a gym snik. >> it is not a gimmick. the main ingredient has been studied in placebo controlled randomized trials and it's showed that in women with pcos which is the most common cause of infertility, it increases their chances by 3.5 times to get pregnant. >> dr. jackie? >> there are different reasons for infertility and, of course, pcos is one of them, but what's the target audience and i notice that it had only been used for women who have been trying for a few months and it's not

considered infertility until after 12 months. >> even healthy women have a low chance of conceiving each month. so right now preg prep is the only option available for healthy women to help them nudge nature along and have all the right nutrients in their body precon semptiception and it hel get pregnant more quickly. >> emmi, question to you. >> i'm wondering what you're doing on the distribution side online. >> we have a website, pregprep.com where we're selling our i said very well every day. we're building a wonderful community for our customers. we're currently in 2,300 cvs stores nationwide and our goal is to be in 7,000 cvs stores come the new year. >> what's to stop some of the big drugstore chains from replicating the product? >> we have two patents pending, one for the regime and unfoone

the ingredients. >> is there any point you would tell them to stop the preg prep and to see a doctor? >> we tell them if you have tried for six months you should have a consultation with your doctor. >> now we need to know if the panel thinks is company is the next big thing. are they in or out? alicia? >> the fertility market is a really big market and my concern generally for any company is whether they're exploiting consumers who can be desperate to conceive, but that can concern in this case is mitt gaded by the fact that they have a doctor on their founding team and this is a research-based product. i love the fact that they have distribution in cvs and i also like how it's a low-risk, low-cost solution. i'm definitely in. >> what about you, dr. jackie? >> i'm a little concerned that we're saying that we're helping nature because we don't really consider it infertility until we

have actually tried getting pregnant for 12 months and the studies show that women got pregnant in zero to three months and six to 12 months which would probably happen normally. so i'm out. >> okay. >> you're out. one in, one out. what about you, emni? >> the achilles' heel is the fact that with your brick and mortar, granted we're all of three weeks in, there isn't enough data to see how effectively the company is taking that offline relationship and making it online. so if the person buys month one, doesn't get pregnant, how do you inure them to come back and buy more? that kind of subscription model is more effectively done online. i would have liked to have seen more of an emphasis of online distribution, but the product is differentiated. so i'm in. >> two ins, one out. ladies, what's your reaction? >> we love all the feedback. we really appreciate it and we're going to continue to take all of your comments as we grow this business and help women

nationwide get pregnant. >> best of luck. >> thank you. >> thank you so much. >> thanks to marjorie and dr. laura and our panel. that is today's "power pitch." >> so what about you? are you in or out on preg prep? tweet us at cnbc power pitch and follow the conversation with #powerpitch and tweet me @mandycnbc. tyl tyler, over to you. let's look at gold prices. they are closing right now and you see they are down 1% on the day at $1,114.90 an ounce. prices down about 5% in the third quarter, so it is not only equities that have struggled other the past three months. let's take a look at silver, copper, platinum, and palladium. silver down a little bit there, about a nickel. copper up a bit, about 8 cents. palladium down significantly, almost 1%. and platinum down more than 1%.

mandy? >> okay. let's get an update on what's happening with the markets. we seem to be moving back up with the dow. it's gaining by 145 points right now, but still not nearly as good as the 248 that we were seeing at the session highs earlier on today. let's get more on the trading action with an early appearance from mr. bob pisani. >> great start to the morning, 4 to 1 advancing to declining stocks. almost all the sectors on the upside. look at the s&p 500 and then we went into the european close and it drooped a little bit. now we're coming back in the middle of the day. take a look at the markets. we were lower after the european close, 2 to 1 now advancing to declining stocks. that's half the advancers we had earlier but still pretty good. volume is on the moderate to heavy side for the last trading day of the quarter. the biggest worry going into the fourth quarter is this, everybody knew energy and materials would have a lousy quarter. nobody thought health care was going to of a houlousy quarter. it was one of the expectations for a big gain. it was a winner going into the

year and i think that has really thrown people mentally off their game in the last week and a half. we know some of the causes, hillary clinton talking about it, boehner's resignation throwing some questions about medicare advances and increase this is medicare. that's been a problem. nobody had this on their game plan and i think that's rattled people a little bit. >> certainly we're seeing a reset of expectations. thank you very much, bob. tyler, over to you. >> folks, an awful month and a bad quarter for stocks. major averages sinking 7%, 8% as you see right there depending which index you choose. will we finish the year with a big rebound in the fourth quarter or is more pain ahead of more gain? we'll ask jpmorgan's trillion dollar man richard madigan. you're watching "power lunch" on cnbc, first in business worldwide. can it make a dentist appointment when my teeth are ready? ♪

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it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. hello, everyone. i'm sue herera and here is your cnbc news update. reuters is reporting the u.s. carried out an air strike against isis in syria today despite a call from russia to clear that area.

the move is sparking a war of words between the countries as russia begins its own military operations within that war-torn country. but white house spokesman josh earnest said a short time ago russia may have struck targets in areas not controlled by isis. we are a step closer to avoiding a government shutdown. the senate approving a temporary spending bill which funds the government through december 11th. the measure now heads to the house which is expected to pass that bill. a south carolina police officer has died from his injuries after being shot inside a mall. law enforcement officials say officer greg aaliyah was checking on a suspicious person inside the richland mall when shots rang out. a suspect is in custody. and nfl quarterback michael vick is getting another shot at starting quarterback. the pittsburgh steelers announced that vick will take over for injured ben roethlisberger in thursday's match-up against the ravens. 36-year-old vick signed with the team earlier this month.

that's the cnbcupdate at this time hour. >> roethlisberger is going to be out for six or seven weeks. >> exactly. it gives him a nice time to kind of get back into the swing. >> we'll see how much vick has left in the tank. he didn't have much last year with the jets. let's move on now. the bulls out today as you see there. the dow moving back up just the past few minutes. it's been a bearish month, of course. how have the mega caps fared? dom chu here with a look at the big guys. >> we like looking at the big guys because they have a lot of weight. if you look at the s&p 500 down 3.5% for just this month and then you talk about the scope of things, we're down again for the year-to-date period as well. if you take a look at some of the meg cap winners and losers, take a look at this first of all because with the winners you're talking about nike shares. remember, great earnings report from them, some futures order strength up 9%. intel up 6%. and procter & gamble is catching a bit of a bid up 3% this month.

procter & gamble worth the most of all the guys. look at the losers. they have been weighing things down. you could argue some of them have been weighing things down more than others. amgen, merck, and citi. three of the worst performs among stocks with at least $100 billion in market capitalization. citigroup is interesting if you look at jpmorgan chase and wells fargo. a lot of big banks are weighing things down. financials the second biggest sector in the s&p 500. it will be interesting to see if tech, financials and health care can stage any kind of a move to the upside in the fourth quarter. back over to you. >> and we'll ask about tech, financials and health care with richard madigan. will the bulls return in q4? we call him our trillion dollar man. i hope we don't embarrass you when we say that but richard madigan is chief investment officers at jpmorgan's private bank. welcome. way tonight pick up with scott wapner left off with carl icahn. his phase is the joy ride is over for stocks. do you agree? >> i don't disagree if you're

talking return expectations. i disagree if we're making an observation that a market is in correction after it corrected. markets have an awful lot to work through right now. we're concerned about global growth. we're concerned about earnings momentum. we're trying to figure out the sector dispersion and how it carries through and markets correct. we seem to have forgotten that. >> they do. i hear what he says less -- and scott asked him very directly, is this -- are we heading into a bear market. he didn't go there. he said the joy ride is over which suggests to me that he is level setting and he's correcting return expectations and that's what you expect. let's look into 2016. let's get past the fourth quarter. >> got it. >> because we're setting up for 2016 i think is one thing we could all agree on. what are your return expectations for 2016 on the s&p side? >> higher. >> higher. we're at 19 o00 now. >> how does the market look into next year with regard to earnings? we'll finish earnings on the s&p

118 to 120. consensus numbers and i think this is one of carl's points, they're saying 130 to $132 next year on the s&p. we don't think we're going to do that. so we're level setting that back to about $125. then we fight over multiple and that's really the -- >> multiple has been having a very hard time expanding. >> it has but we've risen a lot. so, again, correction without the delivery of earnings which is what we've seen right now forces out multiples coming lower. >> if you get -- without boring -- not boring but doing the math, if you have $125 in earnings and you put what kind of multiple on it where does it get me. >> i will force you $125, not $120 or we have a problem next year. at $125 off of a forward multiple, so looking into next year, i've got a base number on the s&p of 2,000, 2,050.

so rough justice, 2050 to 2250. between now over the next 6, 12, 18 months. >> so 2050 from 1900 ain't much. >> no, it's not. >> 2250 sounds a lot better. that's 350 points higher. >> but, again, context of a market that went literally remarkably down through a financial crisis and back, strong double digit returns, valuations that are fair but not cheap, so i'm not getting paid a lot for that. it all relies on earnings. >> let's talk quickly about the fourth quarter and what you see there. give me three sectors you believe in this quarter right now and three you don't believe in. >> so the one we believe in, which is obvious assuming we are going to continue to see the growth we've seen in the u.s. is consumer discretionary, and you saw some of that even in the nike segment that you just put up. the controversial one to a certain extent and there's a

political dynamic to this, health care, we have not given up on health care and i know it is very -- >> it was a rough quarter for health care. >> again, political motivated and headline driven, not earnings driven, not m&a driven, so the structural stuff we see going on especially in high quality pharma with strong pipelines and with strong dividend pays, we still feel good about. >> but the quality is out there. >> quality. and we could have a bigger debate on biotech. >> and to button it off, the three you are less sanguine about would be energy, materials, industrials. >> which have been obvious in now we came in. we also just cut financials and that was really as a function of the fed letting me down in september. >> how dare they? >> markets were primed to rally. the fed has made people question growth. that's smart from an optionality perspective for them, but we're going to have to work through it. >> don't mess with a trillion dollar man. >> or she wins. >> she's got more than that. richard, always good to see you. >> pleasure.

>> go to powerlunch.cnbc.com right now to see richard's strategy for the emerging markets. >> i love the way he said the fet didn't just let us down, the fed let him down personally. very pointed. let's get to the bond trading action ahead of fed chair yellen's speech. rick santelli at the cme. how are bonds behaving ahead of that? >> they're not very rambunctious and i'm not so sure even if we had the text of her speech early the markets would, a, know who to do with it, or,b, decide whether it's going to be followed through to the words. open it up to the third week in july, you could see that "v" there rn. that's 2%. many are surprised we didn't test it. but the moves haven't been commensurate in breadth but they've been trend correlating same direction. yields down when you see the equities go down. let's look at bunds, two day. they touched that 56 early

yesterday. this is significant. that's the august 21st bottom. if you look at hyg intraday, is this day nine? it's barely up on the day. eight down days in a row. mandy, tyler, back to you. >> i'll pick it up from there. thank you very much. the energy sector talking about electricity here, not crude, it's apparently not set up to meet demand over the next 20 years. well, that is what ge's power and water president and ceo says. he'll be stopping by to tell us what the company is doing to meet that problem head on. also as we head out here is a look at how the sectors are faring on this rally wednesday. all ten sectors of the s&p moving higher with discretionary the leader, telecom the laggard. do not go away. you're watching "power lunch" on cnbc, first" business worldwide. do..whatever. o that's why at&t is giving you 50% more data. that's 15 gigs of data for the price of 10.

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welcome back to "power lunch." i'm mandy drury at the nyse. ford recalling 342,000 windstar

minivans because a previous recall repair might not work. that stock is currently up by nearly 2%. starting tomorrow target will match rival's prices from both online and brick and mortar stores such as amazon, walmart, and 27 other retailers. the shares are marginally higher. gm partnering with navistar to build commercial trucks. general motors shares are up 2%. navistar down by over 1%. did you know that there are currently 1.3 billion people around the world without access to electric power? global demand for electricity is also expected to grow another 50% over the next 20 years. well, ge is trying to address this problem launching a digital power plant today that it says will enable greater efficiency. here to tell us about what's going on here is steve bowles. he's the president and ceo of ge power and water.

great to see you, sir. thank you for joining us today. explain to us -- >> great to be here, mandy. >> -- what exactly is a digital power plant? >> you know, where i'm at right now is out in san francisco at our annual minds and machines conference. this is all about hardware solutions plus software together for really new levels of performance. digital industrial company. mandy, when you say a digital power plant, that's the business of what we're in, providing power plants, but what we're going to have now is a purpose built new operating software level that goes into our plants called predix and that allows the customers to collect all the realtime performance of the plants, that data, and tie it with now new data an lat alytict the developers are creating and drive a new level of performance, flexibility, efficiency and total life cycle costs for our customers. >> does it allow the customers

to collect savingsavings? will it cost the customers more or less? >> the feedback from the customers so far has been very positive. we had the chief operating officer for exelon on stage with us yesterday. if you look at it, when we look at only existing power plants but now power plants, we've run numbers that fuel savings and other savings could be $75 billion of savings across that energy enterprise. >> when you talk about the growing demand over the next 20 years, steve, obviously you at ge would say that you're going to be one of the winners in this space, sort of harness that, but nonetheless, who else do you think is the space do you think is going to be a winner, a competitor alongside you? >> you know, i would say as you have your traditional providers of power plants, then you also have people that are in the digital world, the software players. we, ge, want to do both, and as you said, the world needs 50% more power in the next two decades.

now, ge, we provide over 20% of the world's electricity through our equipment. so we think our domain knowledge of the hardware plus the new software is really going to enable these new solutions and really good feedback so far from the customers. >> thank you very much to explain all of that to us, mr. steve bolze from ge. >> thank you very much. >> thank you very much. the blue chips mostly in the green as you see. only three of the dow are in the red, but the blue chips had been getting battered lately. we've been talking about that. still ahead we'll take a look at some blue chip bargain opportunities for the fourth quarter. all that and more when "power" comes back in two minutes.

proud of you, son. ge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you?

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welcome back to "power lunch." i'm mandy drury. here are this hours "power points." a bullishant anend to a bearish and quarter. and of the ten s&p sectors, utilities is the only one to post gain this is q3. energy the biggest loser down 20%. the biggest winner and loser in the s&p this quarter, teco energy up almost 50% by the way. a big jump along with joy global

on the other side of the spectrum down 60%. thank you very much. stocks staging a nice rally on the last day of the quarter. the industrials up more than 1%, 171 points. s&p higher by 1.33%, and look at nasdaq. they're closing in on a 2% gain at 4657. will this rally continue into the close today and into the fourth quarter? we want you to weigh in. do you expect a fourth quarter rally? go to cnbc.com/vote. the results straight ahead. cnbc.com/vote. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures...

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welcome back to "power lunch." i'm josh lishton with breaking news here on twitter. kara swisher is now reporting that jack dorsey will be named permanent twitter ceo. saying that move could be announced as early as tomorrow. dorsey well apparently continue to run square, the payments company he founded. of course, this search has been going on since this summer when dick costello stepped down from the social media company. recode reporting there is likely

to be some shake-up of the board as well. recode reporting jack dorsey will be named permanent twitter ceo as soon as tomorrow quite possibly. back to you. >> they've basically come full circle. the stock is up by nearly 3% as you were speaking. thank you for the breaking news, josh. a rally on wall street today. we're actually moving back up, folks. we're closing out a bearish month on a bullish note. what's the outlook for q4? we want to hear from you? are you expecting a fourth quarter rally? go to cnbc.com/vote and weigh in. we have susan fulton and bob pavlic, thank you for joining us. i see you favor sectors less attached to the global slowdown like health care, however health care is attached as we've seen very recently to the whims of congress and to policymaking and

all those kinds of things. so my question to you is did you pick up some more health care specifically biotechs in the recent rout? >> oh, no, not biotechs right now. they have too much of an overhang. we are very much into drug distributors, companies like mckesson who are part of the supply chain. they don't have any of the ethical or competitive issues that are causing the -- that sector to have problems. so we like the sector. we don't like the problems so we've sort of picked mckesson as a way to deal with it. >> you are avoiding the biotech specifically but there are others you like. >> yes. >> bob, you reckon we're closing in on a bottom. some people have been burned picking bottoms and some feel we need to see a capitulation moment, maybe even white in the eyes, a panic washout. is that what you're predicting in the near term? >> no. >> not necessarily a panic

washout but i think there's more downside potential. i think today is a key day. you have to watch the market and see where it closes. our technical analyst steve chapman was telling me to watch levels like 1869, 1850, 1840 and 1825. anywhere between 1840 to 1825 is probably an area that you want to start putting money to work. right now we have a little resistance at 1913. in order for the market to continue to rally or at least gain some more into the fourth quarter, i think some pieces have to fall into place. first of all, i think you need a good employment report this friday because it gives some confidence. i think the federal reserve has to move on interest rates in october. i think janet yellen in her speech last week at u mass was telling you she's going to move on rates and i think the market is really hoping that it comes in october because there's going to be a lot more potential for the market to recover what its lost into year end. in december there's not enough time. also you need earnings to fall into place. they need to come in basically in line. i think if an investor is out

there looking for opportunities in the market, you want to look at consumer discretionary. you want to look at the financial. federal reserve is going to move on rates so the financials will benefit. tech unwilling will continue to benefit but also health care. >> okay. >> i think she's right on with mckesson. >> a lot of information there to process. we have to wrap it up. thank you for joining us. susan, bob, thank you for your commentary. ty, over to you. >> okay. >> folks, that will do it for first hour of "power lunch." mandy, see you back here when you get here. thanks for watching. let's hand it off to brian sullivan and melissa. >> thank you both very much. now 2:00 on wall street, 11:00 a.m. in calgary. the dow and oil both higher, oil was. i'm brian sullivan. melissa is at the nasdaq. right now the dow is up 181 points but twitter is all the news right now but the company will name jack dorsey as the new ceo of twitter. that stock is up about 2. -- 2%

right now although not to water it down, we're basically just back to the ipo price for twitter. we're going to try to get kara on the phone, maybe a twitter analyst. there are a lot of other stuff to do today as well. earlier we had a pretty nice rally. that dissipated. it appears to be coming back. bob pisani is on the floor of the new york stock exchange. about two hours ago we appeared to lose some steam. we've gotten it back now. is anybody talking about the fact that russian jets are bombing parts of syria? jo a >> and a lot of people -- that came out at noon and some people were citing that as a possible reason for the decline. look at the s&p 500. the fact is we've come back. we had a strong open and then drooped going into the european close and after the headlines you just heard about syria, and now about 1:00 we started making a comeback. volume has been on the moderate to slightly heavy side. i'll tell you what's worried everybody, brian, about this quarter. everybody -- take a look where

we're going on the quarter. everybody knew energy was going to be lousy and materials were going to underperform. nobody thought health care would underperform. that was a winner, everybody was long health care until a couple weeks ago and it's been a big sell-o sell-off. you know october, brian, is the month for bottoms here. what do we need to get a bottom here is what everybody was talking about when i came back this morning. more stimulus from china. make a choice from the fed, rates up or down. we need a stable dollar, and continue job growth. here is the problem, brian. only one of those, job growth, we have right now. the other three we don't have. so i don't think we have the conditions immediately for a bottom and that's the one thing that's got me concerned a bit here. >> thank you. well, despite today's gains it has been a terrible quarter for the dow. the dow is headed for its worst quarter in years. we're down 8% in just 90 days. with those losses 12 of the dow 30 are now in bear markets meaning they are more than 20%

off their 52-week highs. so many blue chips are down, but are they out or big old stock bargains for your portfolio? let's bring in david sowerby and mark laskini. davi david, start with you, when i see 12 dow names down more than 20%, i'm thinking either babies are getting thrown out with bath water or something around the world is going to be in big trouble in the next couple months because the market is supposed to be a discount mechanism. which one is it? >> brian, it's much more the former. it's usually a sign of -- it's almost impossible to pick a market bottom. nevertheless, when the good names get thrown out with the weaker names, it's usually a buying opportunity. it reminds me of the end of the third quarter 2011. stocks were off better than 8% for the quarter. high yield bonds 5% and there's a difference between talking and doing and the doing part will be to be a net buyer in this type

of environment because you're going to look back much like you did at the end of the third quarter in 2011 and the markets will be higher. not just the next quarter on average. they're usually up 5% after this type of quarter but over the next 12 months they're up between 10 and 13%. that's why i think that the doing part will be get in there and do some selective buying. >> mark, are you that confident? >> well, i think that there has been some indiscriminate selling clearly. i think a lot of that has to do with etfs coming in and blanketing certain sectors and the baby is being thrown out with the bath water, but that said i can't help but think there isn't more work to be done before this corrective process is over. so the fact is while i may be wading into certain quality names that have been disseminated by virtue of their share price decaying significantly more than the underlying fundamentals of the business, particularly in consumer facing areas, at the same time i think there's going to be even better opportunity

probably fourthcoming in the fourth quarter as a consequence of further deterioration in the emerging markets before it's all said and done or an event as a consequence of what's taking place around the world that is prepared for in the form of commodity related fund or some other entity that is overlevered and as of yet hasn't been unmasked. >> let's get to the strategy. david, in terms of one of your top picks, what i notice is it was a real dog in the third quarter, down 48% and it's sort of in this cross section of an underperformer and also in a sector under fire and that would be health care and pharmaceuticals. >> certainly. and i have owned it since it spun out of covidian. the best news is it's mistrusted, down over 40% and but sells price to earnings at eight times. the most discounted in midcap pharmaceutical. it will have organic growth in

the high single digits. it's prospering in multiple sclerosis drugs. that's why i think the doing part is getting in there and buying a name that has some mistrust on it like mallinckrodt. semis are weaker in the tech space arm holdings. for a high quality high growth company. and then finally in the financial space, american express, more than 20% off its 52 week high. a lot of uncertainty on the news on costco. globally there will be continued transition from cash to credit cards and that helps a high quality name like american express or discover. >> it's been a lousy quarter. it's the end of it today. give us some good news, just a piece of good advice to wrap up a lousy "q." >> look at the fundamental underpinnings for the u.s. economy. i think they remain sturdy.

there's been some lumpy reports but if you look inside the numbers, granted a lot of it has to do with the strength of the dollar and the impact on export and consequently deflating prices on the import side, but the employment reading was up on a month over month basis. the key is job growth. i think we will get a respectable number again this friday and ultimately it will revive krorcorporate profitabil. >> supporting equity before a rally before the year is out. mark and david, thank you both very much. >> thank you, brian. >> my pleasure. shares of tesla moving lower by half a percent as they start delivery of the model x suvs. phil lebeau got a chance to test drive the new vehicle. what did you think? >> it was impressive albeit it was a very short drive. just about ten minutes on a closed course in fremont, california. this was the scene last night. we did our drive just before elon musk delivered the first model xs to some of the first people who ordered them at a

ceremony in fremont, california. the ones that were delivered last night, five of them, they are the very first ones. they're called founder's series editions going for $132,000. now, eventually the base price on the model x is going to come down considerably down to around $80,0 $80,000. at least that will be the base eventually. when you look at the model x, three innovations are getting a lot of attention. the falcon wing doors. we've talked about that. a lot of people remarking that that will be the feature that gets the most attention. there's also the panoramic windshield. you really can't appreciate it until you're in the front seat and you're driving the model x. finally when you go to get into the front seat, the automatic front doors, this he mow when you are approaching the vehicle. the doors start to open. the seats prepare for you to get into the gront seat. the question came up about whether or not the model x can handle a full load and towing capacity. here is what he had to say.

>> the model x is capable of towing 5,000 pounds. so 5,000 pounds while carrying seven people and quite a lot of luggage. >> and quickly as you take a look at shares of tesla versus ford, gm, and toyota, no comparison. it has outperformed them this year. the first deliveries have been made. now the focus is ramping up production through the end of the year. let's get a tesla shareholder's view on this. drew is long the stock. great to have you with us. when i look at the suv, it's really cool. the model x, there's plenty of cool factor about it. in terms of cannibalization is there a concern that the aspire will be an ex-pire and you're going after the same audience in. >> i don't think so.

i think at the end of the day tesla out quite a ways. tesla is not going to care too much which version of the platform they sell. i think in the nearer term you will find a lot of s households add an "x." i think there's a lot of that anecdotally going on. there's a sedan market and there's an suv market. i think the suv market may be larger than the sedan market and that's great. that's a good thing for tesla. >> what are you looking for in terms of the next few catalysts? one would have thought that the "x" delivery would have been one of those catalysts. >> i think much like the pending interest rate raise, the actual raise is going to be much less of an event after so much discussion about it. i think that was the situation here. we've talked about the "x" for well over two years. finally had an event to kind of formalize it. i think that the real positive

thing that's happening for tesla and it's not a step forward positive, it's a continuation of an innovative company asserting their domination over a very large industry. i think that's the story here, but we formalized the "x." we now work on production ramp which will take some time, and then we layer in the gen 3 and its own process of introduction and eventual production. but all the while tesla sells as many cars as they can make for many, many years and that's the key to this situation. >> drew, thank you. drew cupps. >> twitter shares are moving on reports that the company will name jack dorsey as the permanent ceo. joining us on it's phone is the person who broke that story, recode's kara swisher. thank you for joining us. >> no problem. >> great job breaking that story. what do you -- >> we'll see. >> well, we trust your reporting as always, kara. what do you think this will bring to twitter if, indeed, it

comes to pass as i believe it will? >> i think it will bring continuousness, a bit of stability. this is someone who has been seeing the ceo recently, making a lot of changes. someone that is acceptable to all the major players and it's someone that wall street has been pressing for. just the other day more investors piled on saying they don't mind him being the ceo of two companies. i think it's just the support for him has gained a lot of momentum and he's -- there are other people they did talk to but everyone i talked to that they talked to said they weren't getting the job. >> dorsey no doubt a very smart and capable guy, but, kara, when you look at twitter and you look at the growth of instagram, facebook taking over the world, snapchat doing well, is it too late in some respects to fundamentally alter the course of twitter? >> well, he wasn't ceo during that period.

of course, he was ceo previously and didn't have as successful a run. i think they've got a lot of assets that are very valuable in terms of realtime news, realtime search in a real way if you think about it. it's got a lot of brands, the brand is fantastic. one of the issues is the product and that's an area that jack dorsey excels in. and so i think that's a good thing to have a product first, no matter who they picked, it's got to be somebody with product chops. here is the guy who sent the very first tweet out so he knows something about it. >> it looks dick costello will be out completely from twitter when this occurs? >> we previously reported that several times. and so i think it will be interesting to see if there's a rejiggering of the board, if certain board members come off and at the same time what happens to someone like adam bain who is a critical employee. his name was mentioned as a potential ceo. he wanted to work with dorsey.

he wasn't taking that job as long as dorsey wanted it which dorsey clearly has wanted the job. >> kara, it was a real pleasure. thank you very much. >> thanks so much. >> let's now bring in james. great to have you with us. the pop in the stock right now off the news, that's nice. up 3% but taking a longer term perspective, it's down for the quarter. it's been pretty much within a very tight range ever since jack dorsey had been thought of as the potential successor to costello. should wall street be more excited or is this sort of tempered response to dorsey being named, is that appropriate? >> sure, thanks. obviously i think that there's still a lot of caution out there. there's just so many unknowns that are happening with twitter, but dorsey coming in i think is the first sign of confidence coming back into the story. there's been a lot of reporting on dorsey increasingly likely to come on board as the permanent ceo. so i think that was starting to get digested already.

the question really remains is, is a dual ceo role at this time the right thing for twitter. we put out a note questioning if that's the right thing at this stage of the company. as far as who is coming into the helm at this time, you need a product guy and a founder status like dorsey can bring in the kind of magnitude of changes that a nonfounder cannot bring. >> so a lot of unknowns about dorsey and what he plans to do. in terms of adam bain s there a risk the company loses him which would be negative clearly. >> i don't think so. at least not at this time. he stepped aside from the discussions according to reporting from kara to make room for dorsey if he wanted the job. so he's very much well liked in the company, well respected within the industry and i think there should remain a place at twitter with dorsey taking over as permanent ceo. >> i hate to be cynical but according to fact set, jack

dorsey owns 3.2% of the company. so he's got about a billion reasons to try to monetize this company. do you believe ultimately twitter will be sold? >> i think the strategic value of it creates a floor to the stock, but i think that as far as selling the company, i think it's increasingly unlikely. you know, you have facebook encroaching on to its territory building similar capabilities. they are partnering with companies like google which allows them to license the content which diminishes the value of actually acquiring the asset. so i think they need to stand alone. they can stand alone, and if they do make the appropriate product changes and the product changes boiling down to getting consumers engaged in understanding what twitter is, then i think they can prosper as a standalone entity, but they have a very short window, i would say three to six months

until we see the ground work for what twitter 2.0 is going to look like. >> we'll find out. 2.7%. not much above the ipo. thank you. >> thank you. >> this week shares of 15 major retailers have hit new 52-week or multiyear lows. our own retail guru, do you like that. >> i like that. >> says a couple names deserve it but a couple don't. we'll separate the good from the bad from the very ugly. also one analyst going big time bullish on troubled glencore and the one sector that could get a big boost thanks to your hard earned tax dollars. stick around. "power lunch" will be right back.

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t minus 29 days until the next gop debate and it's happening on this very fine network. be sure to watch the republican candidates square off from boulder, colorado, live on october 28th, which is also the fed day. a huge day that day. but catch the debate right here on cnbc. well, shares of ralph lauren popping on word that its founder and ceo, ralph lauren, a stepping down from the company's daily operations. why is the stock up? he's an icon? because the market also loves the new guy. courtney reagan joining us with who is the new guy? >> the new guy is stephen larson. after 50 years ralph lauren's management looks more like a fashion house. at nearly 76 he's handing over

the ceo title to this young retail standout. his name is stephen larson. lauren will stay on as chief creative officer. larsson has led old navy and built the brand so successly that gap's joe says old navy is the template. prior to old navy, he was with h & m for 15 years. analysts and investors are counting the change as a business loss for gap but a gain for ralph lauren. they have been struggling with foreign exchange headwinds. before the announcement ralph ra lauren was down 44%. michael kors also holds the creator of creative director.

the list like that goes on and on. brian? >> all right. courtney, thank you very much. let's bring in cnbc contributor and aforementioned retail guru jan rodgers. first off you have some interesting stuck stof stuff. >> i'm almost as excited about it as courtney sounds like she is. i think it's a great idea. ralph is 75, 76, jackie who is stepping down was 63, 64. she wasn't going to be the successor. i think it's hurt the stock there wasn't a successor and i think that stephen larsson is a good choice. the pushback is he really only does fast fashion, low end stuff. that's not ralph lauren. i come back and say do you know who the biggest seller of ralph lauren is? tjx. >> parent company of tj maxx. >> second biggest seller, macy's. >> it's a mass market retailer. with a great image.

that's a hard thing to do. people are crushing the gap. >> rightfully so. >> why you're here, there are 15 retail stocks hitting multiyear lows. you think one of them is well deserved. dilla dillard's. why? >> the one i picked was dillard's because they bottomed at $4 after the recession. they peaked at $136. and from 1988 to 2008, i describe think them as being asleep and having woken up and fixed the company. they quit doing things that were bad. >> i think you're making the bull case. ja th ja. >> they closed stores, improved the product. did all those things and the stock reflected that. and now the game is over. and i don't see what the second act is. they're not strong in omni channel retailing online. they're not opening off price. they're not driving a business that's going to have something

to drive forward sales levels. >> on the flip side y do macy's and kohl's deserve to be much higher than they are. >> because they've done just the opposite. if you look at macy's, i contend they're the first or the best omni channel retailer in the country which makes them the first or second in the world. and the only one better at it right now might be nordstrom's. so macy's has a great future. they have already spent the money on omni channel retailing. everybody else is far behind and spending prodigiously trying to catch up. >> and kohl's the same sation situation. >> same situation. and macy's has a lot of value in the real estate and despite the irs not wanting to give power play on reits, they're going to monetize real estate and they're not getting paid for that. >> it was a pleasure. thank you. still ahead, some dangerous waters for today's disaster du jour stock. that name coming up.

and some names that might be in your portfolio. cisco, wells, gilead, and comcast, all higher today. oh, berra cue barracuda. we're going to go crazy on you coming up. h are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver?

oh, barracuda.

welcome back to "power lunch." it is 2:27 in the east. today's disaster du jour, barracuda networks after taking a hit on reporting a sales myth and weaker than expected guidance, the stock down 34% right now. >> ouch. take a look at hack and that is the etf that follows the cyber security stocks down 20% on the quarter but that could all change in the coming quarters thanks in part to uncle sam. s dan put out a note today saying a big inkroo he is in federal cyber security spending could help these names. dan, you're saying it's a $20 billion next generation market opportunity over the next three years. how much of that right now is in the stock? how much are they getting of that opportunity right now? >> and this is only about 8% to 10% penetrated. i think this is going to be a big tailwind that we're going to see this quarter for a lot of these names like palo alto, fireeye. and that speaks to major runways

the u.s. government has underspent on cyber security for years. we're starting to see the green light. we believe it was up 40 percent year-over-year and that's going to be a benefit, especially in 3q. >> at the same time, these stocks don't necessarily react to things like increased spending headlines or even major cyber attack this is which those companies are then deployed. i'm talkilooking at some of the stocks in your notes. palo alto networks and fort. there is a huge chasm between those names and fireeye, barracuda, and semantics. >> when you look at companies like barracudbarracuda, we look as the atlanta braves of cyber security, a lower quality. fireeye has been a unique battle just given the lack of profitability, but i believe they do have a recovery there.

i think that's why you need folks in the next generation players. that's why palo alto remains our top pick. and cyber security we believe has grown 30% plus and i think it's a sector a lot of bulls return to going into year end. >> this is the kind of sector where you have to pay up for performance. palo alto is up 73% over the past 12 months and you're saying that's the top pick at this point. >> yeah, and i think that's one if i have to look at it, that's a $200-plus stock and i can see it going to $250 on free cash flow. then fortinet, proofpoint, you look at fireeye and start to look at checkpoint. i think it's the basket approach. cyberark is a big government play. i think the basket is the best way to play the sector and i think we could see a lot of m&a coming like cisco, symantec.

>> let's get to jackie d. at the nymex. >> very interesting action in oil today. pretty much all over the place but we did settle negative still holding over that $45 range. thee ia data was a mix of bullish and bearish. the initial number 4 million barrels, the build we saw, bearish. but production did decline and imports were up. the technicals also, traders telling me, were forming the same pattern when we were around 60 bucks a barrel and we broke to the downside. they don't necessarily think we're breaking out lower but the breakout is likely to come soon. having said that, hurricane joaquin, watch it. it depends where it lands how it will impact oil. i heard you during the break, how much were gas prices when you were cruising in betsy? >> oh, gosh, you know, that was so long ago, jackie. i can't remember but i will say this about that old toyota -- we were taping something about our

first car -- you heard me, the viewers didn't. it got pretty good gas mileage and it was a manual transmission. betsy was the name of the car. i'm embarrassed. >> sorry. >> i was taping something for jay leno. thank you for outing me. the case for glencore, one analyst defending the stock. why he says glencore has a lot of upside ahead. as we head out, another look at stocks with 90 minutes left in the trading quarter. a lot of green today. we're back after this. you pay your car insurance premium like clockwork. month after month. year after year. why he says glencore has a lot yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay even more for using it?

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hello, everyone. i'm sue herera. here is your cnbc news update at this hour. russia joined its u.s. and it's allies by conducting air strikes in syria today. the move drew strong criticism from the white house and john kerry who said the u.s. would have grave concerns if russia used force to support the syrian president. first it was planes, now trains. tomorrow amtrak will begin charging fees for ride whose go

above a certain number of bags. each passenger will be allowed up to four items on board before being hit with a $20 per bag charge. the ncaa scoring a big legal win today. a federal appeals court ruled that although the organization is violating antitrust laws by using athlete's names and images, it is not required to pay those athletes cash. today's decision overturns a prior ruling that allowed division one athletes to receive payments. and calling all dreamers, someone could win $301 million in the powerball drawing. it's the last chance to play before the odds get tougher. next week the odds are increasing the range of numbers a player can pick from. get your ticket while the winning is easy. i already have mine. we'll see how i do. that's the cnbc news update. brian, get your ticket. >> i will. and i'm reading about the last powerball winner, his name was willie nelson, not the singer. he went to a specific market to

pick up some bacon that has the rind on it and is really fatty. he said his wife liked that bacon so he went there to get that bacon and bought the ticket. proof once again there's nothing bacon can't do. >> absolutely. >> make you rich. >> and he's not only bringing hoke the bacon, he's bringing home the bacon. >> maybe he went hog wild. >> could be. >> sue, thank you very much. >> thanks, brian. >> i know. i feel it, too, folks. it's time for "trading nation." we're trading the semiconductors trading below the 50 and 200-day moving day average. todd, technicals on the philadelphia semi-conductor index having looked good. any change to that? >> there are actually some nice leadership today if you look down at the i shares sector, pharma, hale caealth care, semi leading the way up. to set it up, let's look at the

weekly chart. kind of what i'll call flash crash part two at the end of the august. we held a long-term weekly support right around the $550 level in the semi-conductor index. so we've bounced back and then as we shift down to the daily chart, more short term, we're going to trade up to what i call a key decision point which would define a break of the down trend that began this summer around 620. for short-term traders in trading nation, i just want to trade towards it. if we break through it, we can talk about higher price approximates. >> dennis, would you buy into not one name but the semi-conductor sector here? >> by buying one name you buy into the semi-conductor sector. >> you get my point. i get yours, too. >> you lost me on the bacon. i'm trying to get back. the stock i buy is intel. it represents roughly 20% of that semi-conductor index. i like intel because it has a 3% dividend yield, trades at a 12 pe.

it's relatively a conservative stock but it's also moving into growth areas like it's moving into the mobile area much more aggressively and the part that no one is really talking about with all the automatic driving cars that are going to be coming out there, intel is really big in that space. so anything under the hood that involves a chip is pretty much owned by intel. the trade i like on intel is to go out and buy the 31/35 call spread expiring in january. it gives you exposure to that what i think is best of breed stock, not the entire index, and you can quadruple your money if the stock rallies with the rest of the semi-conductor index or on its own it can outperform. you have the opportunity to yawed rupple your money. could be worth $4 by the end of january. >> dennis, appreciate it. todd, thank you. watching for a little turn in the semis. go to tradingnation.cnbc.com for more. stocks are higher right now. kind of a nice end to what has been a terrible quarter, worst

quarter in more than four years for the dow. up about 1% though today. on deck, an already hot company at the forefront of tv technology getting another boost from wall street. that name and the call coming up in "street talk."

this is a stock we're watching very closely right now. shares of apple turning negative on the session. we point this out because yesterday it had market underperformance versus the broader markets, down 3%. it went negative for the year and today once again apple is struggling relative to the gains we're seeing across the board in the broader averages. brian? >> well, it is time now for "street talk." every day analyst recommendations on stocks you need to know about or at least we're going to tell you you need to know about. stock number one, canadian pacific railway, cp. goldman sachs upgrading from a

neutral to a buy. they see industry leading earnings per share growth. part of a bigger call they made on rails. they upgrade the entire sector to attractive and a buy on union pacific as well. >> canadian pacific has been a gag ar laggard. up neck here, lowe's. creed suisse g credit swoouisse getting more bullish. this comes after meetings with management. there is they say a focus on increasing share of the prochingsal spending and also taking share from sears. >> and i look back and lowe's has never been at 70 -- or 80. i think the high was $77. it's really a call for an all-time high. stock number three, madison square garden. upping it to a buy from a hold. they like the asset portfolio following the spinout of madison

square garden networks. they're spinning off and it will be a separate company. they say series tv delivery changes, the sports side of msg should have a lot of intelle intellectual property value. >> fourth stock metavation. cow wan is upgrading them from a market perform. the analyst is still concerned the drug's estimate is too high. but it has a good franchise value. >> they better hope because 13 analysts cover the name and the average price of those 13 analysts is about $66.50. so that's about 55% higher than the stock is now. yikes. final stock always the smaller under the radar name. this one is max linear.

it's a carlsbad, california, semi-conductor company primarily for communication products. chips for things like 4k ultra hd boxes. eight analysts cover the name. $16.70 a share is the average price. stock at $12.25. >> i was going to say they were seeing better than expected anticipated demand for their chips. so that's a good sign going into fourth quarter here. shares of glencore -- that was "straet talk." shares of glencore has lost value but one analyst is defending his pick. as we head to break, look at some of the most widely held stocks trading, google, apple struggling to hold onto gains, microsoft and jpmorgan chase. you're watching "power lunch" on cnbc. we're first in business worldwide.

the most watched stock in the world lately is swiss mining giant glencore. shares hammered lately as glencore's debt laden balance

sheet comes back to bite them. paul gate remains bullish on the stock and he joins us now. paul, welcome. some are concerned glencore stock could lose much more, maybe lose everything. why are they wrongeverything. why are they wrong and why are you still optimistic on the company and its equity? >> i think it's probably overdone, and if you read some of the commentary that's been put around, even there, they would point out that that's not their central case. so some of the more bearish commentary is around stress testing and downsizing. this is an exposure to commodities. with that, these equities are going to move on those dynamics. with that said, if we look at where we are, we are at historic, multi-decade lows in terms of the profitability of the mining industry. and of course, that's set into the valuations we see for glencore and a whole host of other mining names. in terms of where we see this

going from here, we are starting to see supply side cutbacks across the board, and particularly the commodity for glencore. those supply side curtailments will start to feed into a timing market. that timing is a fundamental market. we will see an appreciation in share price. also in the price of copper. that will lead to a recovery. so at the moment, we're at the point of maximum nervousness. for me, they don't reflect fundamental fair value for the stock. >> according to capital iq, total long-term debt for glencore all in, paul, is nearly $100 billion. >> it's not $100 billion. it's nowhere even near that. >> that's capital iq. >> well, i've also got capital iq's download of the figures up in front of me as i speak. and they don't have $100

billion. so look, there is a significant amount of leverage. it's nowhere near that. so i strongly suggest you go and have a look at that. you've also got to remember a large chunk of that debt is being used to finance short-term infancy in the trading business. you've got to split those up. 5,000 of that is used to finance the longer-term assets. that's not to down play the leverage. clearly financial leverage on top of operating leverage. it's been a lower degree of financial leverage. but listen, it's a combination of those two that creates the pressure for a company like glencore. but on the way up, of course the leverage also exists there. any recovery in the commodity market and this is a stock that will do very well. >> where i made my mistake, and

i'll say that, is substituting liabilities for debt because i threw in accounts payable. the number is 99.7 billion. i'm looking at it right now on capital iq. >> i suggest you have a look at it again. two billion in short-term borrowings. long-term debt. 38.8 billion in long-term debt. >> i think, though, brian -- i'm sorry -- >> hold on, melissa. >> i think the point is -- if paul's going to call me wrong. i'm going to go through the numbers and they're going to add up to 99 billion. >> if you're saying the net data is $99 billion, i suggest you look at the numbers. >> gentlemen, please. let's move on. i'm sure the viewers don't want to take a calculator and add all these numbers wrong. >> be if i'm going to be called wrong on the air, on my own show, i'm going to point out the numbers, melissa, and paul. that's all. >> the numbers are well-noted on both sides. moving on, though, i think the point is that glencore has a lot of debt. i think, paul, the real concern of investors is that 25% of that debt is due at the end of 2016,

and right now that debt is trading like a junk bond, even though it's investment grade. 13% yield on a lot of that debt that's due at the end of 2016. can glencore pay this amount through 2016 with commodity prices where they are? let's say we don't see a bounce. >> yeah, look. if we don't see a bounce, at the moment, glencore put out two days ago a statement saying that they were cash-positive in terms of their operations. on my own numbers, when you run it, and there's a significant valuation, the currency alongside those, i agree with them. if you manage to keep these businesses that are cash positive from the industrial side of it, we've also got the earnings from the trading side. in terms of liquidity, they've got $13 billion of liquidity available to them, even to the extent that there is a refinancing requirement in terms of the bonds in the immediate

short-term. some sufficient head room to see themselves through the beginning of next year. that's a shorter term financing that's attributable to their business, and there's no reason to think that any of the banks are going to be looking to withdraw liquidity to that business. it's an essential part of the world supply of commodities. grain has to move from a to b. only a few companies that are involved in that. and they all have a capital structure that is very similar to glencore's in their reliance on short-term financing. someone has to deliver the coal. someone has to deliver the corn and that's what these businesses do. there are some concerns around the level of leverage on the industrial side of the business, but let's not conflate that necessarily with what's going on in the trading business. >> all right, paul, i didn't mean to argue over the numbers. i appreciate you coming on and defending your point of view as well, so thank you very much for coming on the program.

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tonight on "fast money," we're taking a look at how carl icahn is warning about it, how merrill lynch is also warning about it, saying it's a slow-moving train wreck that is accelerating. we'll listen tonight at 5:00 on "fast." in a few minutes, janet yellen speaks to a banking conference. kenny, what are you expecting? >> i don't suspect she's going

to say anything at this particular conference that's going to change the mindset of what she has most recently said. if she doesn't do it now, she's going to have a hell of a time doing it in december in the middle of that debt crisis. >> peter, are you going to say ditto? >> i don't want to say ditto, but i will let you know that i think that it probably won't be until the first quarter of next year. i think there's too many data points that they're waiting to see get better and it's just not happening. i think there's just too many rescues by raising rates right now. i think we have to wait a little bit longer. >> kenny, do you think we hold on to this rally in the close? >> i think we do, but tomorrow starts the fourth quarter, the slate's wiped clean, so you could get some volatility going into the first couple of weeks of october. >> so volatility ahead. you agree with that, peter? >> yes, i do. i think you'll probably see it until the earnings season

starts. >> right. i've got a giant melissa here. look at this. "closing bell" starts right now. hi, and welcome to "the closing bell. i'm kelly evans. >> i'm bill griffeth. so it's later than it's ever been. this is the last day of the quarter, and it's been a rough one for the equity markets, we know. although we are rallying today, just off the highs of the session. we're going to see how this final hour finishes up. we'll tell you how to get positioned for the final quarter of 2015.